The Resilience Of Energy Supply Chain - 1588 Words

INTRODUCTION In the era of globalisation supply chains are getting more lengthy and complex hence they are now more vulnerable to disruptions. The resilience of energy supply chain by Luca Urciuoli, Sangeeta Mohanty, Juha Hintsa and Else Gerine Boekesteijn Accepted on 24 September,2013 takes in account how various companies take preventions against supply chain disruptions or security threats and how they manage their supply chain in case a disruption occurs, it also exchanges views on European union support mechanisms and interactions with the oil and gas companies along with the improvements that can be made by the union in order to make supply chains more robust . In this essay I will discuss the reasons for which these disruption occur†¦show more content†¦. As suggested by the article to keep reserve stocks for up to 90 days of supply. For example, in Baji a major oil refinery was set on fire by ISIS forces who were controlling this refinery in the past. This oil refinery was one o the major oil production companies in the country. In such cases small safety stocks will finish in a few days, so only keeping reserve stocks may not be the solution . World s 60 percent oil reserves are in middle east where these types of incidents occur (Critchlow, 2015).Deciding the perfect amount of safety stock is very critical and depends on various factors like company sales ,forecasts and transportation risks. In case of natural disaster or a major disruptions various strategies can be used to prevent loses. As the article suggests alternate product design can be used in case of disruption ,this approach is practical and was used by many companies in the past. For instance, In March,2000 after a major electronic company caught fire in Mexico both Nokia and Ericson were facing component shortage . Instead of waiting for the product Nokia changed the product design and sourced different component from other suppliers while Ericson on the other hand lost millions because of this